HMRC has said the aim of the DDS will include a number of features for those who are disclosing, including a mechanism where they can upload documents for the taxman to see digitally. This, said HMRC, will eliminate the need to send them by post.

The DDS also seems to be the latest ploy in HMRC’s ongoing mission to interact with taxpayers more directly, leapfrogging agents. “The DDS will calculate the omitted tax and late payment interest; this should help reduce the need for tax advice for low income groups”, said Rebecca Busfield, partner at Watt Busfield tax investigations.

Reacting in a blog to the DDS's impending introduction, accountancy firm Ormerod Rutter took a cautionary tone: “According to HMRC, one of the benefits of using the DDS is that it removes the need for taxpayers to seek advice and help from their accountant, allowing them to disclose by themselves if they so choose – but this might not be the best way forward”.

Busfield agreed with Ormerod Rutter's caution. Cases where the circumstances or facts are complex and may need more explanation should avoid the DDS, she explained. “HMRC will expect a full disclosure of all irregularities, and it is important to make sure that taxpayers take care and have checked their records to make sure their disclosure is accurate and complete.

“HMRC will check the disclosure with third parties or against results of other businesses in the area to make sure it appears reasonable.”

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An important caveat is that the DDS will not give immunity from prosecution for serious tax fraud, unlike the contractual disclosure facility (CDF) option.

Clients using the DDS also risk missing out on available tax reliefs and, said Busfield, “widening the scope of the investigation too far.

“Given the cutbacks to HMRC resources”, Busfield continued, “it may be difficult for users to access appropriately trained HMRC staff, and it likely that taxpayers will have questions about using the service.”

From HMRC's perspective (it seems), anything that distances a taxpayer from their agent / advisor is a good thing. If they wanted to reduce professional input, they might want to improve their own accuracy (PAYE Coding etc etc etc).

Their marginalisation of agents is evident through the whole digital project. Worrying......

The average tax payer is at best advised by the man down the pub in the absence of an accountant. Even explaining payments on account is a challenge for the average client, never mind the rest of the tax system. Those who try to go it alone invariably come a cropper and they need proper advice. It is a scandal that could end up affecting clients badly. HMRC should not be attempting to insert their own 'expertise' and sideline the accountancy profession.

Despite wholeheartedly agreeing with agents being marginalised by the new HMRC digital services (roll on AOSS....) my take on this is that it is just HMRC creating a new method of disclosure which they can direct their customers towards where necessary. In fact by not having something of this nature it could be argued that HMRC are currently missing a trick, which is a consequence of the elimination the Local Enquiry Centres.

I cannot imagine existing (represented) clients using DDS so perhaps it would only ever affect the high street accountant by giving unrepresented taxpayers who need to make a disclosure a chance to repent online instead of either going to an HMRC office (which is no longer possible) or coming to an accountant. And how many clients like this do we see every year? Very few to none is my experience.

An accountants role to is to help a taxpayer get their tax affairs right.

Recent example:

Taxpayer uses Xero with bank feeds and purchase invoice feed into Xero from scanned invoices sent to ReceiptBank.No problem with Xero itselfContinual errors with ReceiptBank miscoding / misallocating invoicesAccountants role consequently needs to include = identify and put right ReceiptBank errors and ensure that Xero records are correctResult = compliance with tax lawsAbsent of using an accountant the taxpayer would be getting their tax liabilities wrong

The above is a true real world example, with a fairly knowledgable taxpayer who can "see the light" and uses professional accountants rather than follow some concept or notion of HMRC that the only way is digital and no need for mischevious accountants - probably dreampt up by fresh from college / lack of experience youngsters in HMRC - youngsters who are quite likely constantly using Facebook, Twitter, Linkedin etc in working hours - effectively drug addicted to apps / smartphones and consequently think that's the only possible way forward.

I continue to be amazed that HMRC believe that self employed and small companies want to do this filing and keep there accounts up to date. I have recently had to register a small limited company for VAT and PAYE. A simple enough task but I had to use their Govt Gateway (the fact they had one was a minor miracle) to do it and this is something we will not be able to do in future and there was no way my client wanted to do it.

Most small businesses just don't want to be involved and that is why they come to us.

No doubt the "big boys" who are liaising with HMRC do not see this as a problem as their clients have enough qualified staff to manage these "mundane" tasks.

...to try to get small businesspeople to be unrepresented. Was talking to another agent only a couple of weeks ago who'd come across small business owners where the Revenue had advised them that they don't need an accountant, because that's just an unnecessary cost.

Was talking to another agent only a couple of weeks ago who'd come across small business owners where the Revenue had advised them that they don't need an accountant, because that's just an unnecessary cost.

These people just can't be trusted.

After I had attended the HMRC agent's consulting meetings a few years ago, and their forecast staff reductions, I predicted that the HMRC helpdesk would frequently say, "Have you got an agent?".

Hmm, sounds like they are just outsourcing the scanning department at HMRC and bolting on some auto-computations which will be a bit flakey, just as HMRC's computations are now, or used to be 'back in the day' when local tax offices existed.

I don't see this is any real change, its just a channel to move data.

However when it become compulsory (like everything else slowly does) it will exclude a large number of users and make life harder for unrepresented tax payers having to battle with horribly complex interfaces.

As we all know, as and when HMRC introduce DDS it won`t be user friendly to the non professional, it will probably result in more errors by HMRC and eventually we accountants will be called upon to undertake the follow up appeals and corrections.

If HMRC are really trying to help the SME reduce accountancy costs why not increase the competency and number of staff on the helplines.

No doubt some bespoke software company will make a fortune selling this DDS package to HMRC.